WHILE the overall employment numbers improved in November 2023, data from the Philippine Statistics Authority (PSA) showed millions of Filipinos, composed of mostly women, dropped out of the labor market due to household duties.
On Tuesday, the PSA said the number of unemployed Filipinos declined to 1.83 million, or an unemployment rate of 3.6 percent, the lowest since April 2005. (https://businessmirror.com.ph/2024/01/09/jobless-rate-in-november-lowest-since-2005-neda/)
However, PSA data showed 8 million Filipinos did not participate in the labor force because they had to attend to household duties. This is on top of the 11.966 million who are not in the labor force because they are in school.
“So may pagbaba tayo sa [So we’re seeing a decline in the] number of persons that participated in the labor force. Ang malaking nag-contribute, ang mga household family duties ang sinasabi nilang reason. [The biggest contributor comes from those who state household family duties as the reason],” National Statistician Claire Dennis S. Mapa said in a briefing.
Most of those who cited “household family duties,” he noted, are female. “So those are two major reasons they did not participate [in the labor force]. They have household family duties and most of them are female, and second is schooling,” he added, partly in Filipino.
The National Economic and Development Authority (Neda) was quick to point this out and said the labor force participation rate slid to 65.9 percent from 67.5 percent in November 2022.
This translated to an estimated 51.47 million Filipinos aged 15 years and older in the labor force, lower than the 51.88 million in November 2022.
Based on the data, the number of those who said household duties prevented them from being part of the labor force increased by 930,000 compared to the 7.077 million recorded in November 2022.
For those in school, the PSA data showed the number represented an increase of 912,000 compared to the 11.054 million posted in November 2022.
Neda said the decline was mainly due to reduced participation of women at 55.4 percent from 57.8 percent; and young people at 34.4 percent from 40 percent in the labor force, influenced by family responsibilities and schooling.
Employment trends
Rizal Commercial Banking Corporation Chief Economist Michael L. Ricafort said the trend in local unemployment rate data would still sustain especially at the 3-percent levels.
This is consistent with other Asean/Asian countries whose unemployment rate levels are at the 2 to 3 percent levels.
“This could be a new normal for the Philippines in a positive context amid the country’s relatively faster economic/GDP growth, slowing/easing headline inflation, and favorable demographics,” Ricafort said.
Meanwhile, ANZ Research said Asian labor markets have been “surprisingly tight.” The think tank said the increase in labor demand has exceeded the increase in labor force growth and higher participation rates.
It also noted that unemployment rates have dipped, including in the Philippines. But wage growth has remained broadly in line with its prepandemic trend.
“As wage growth has been modest, inflation is likely to remain mild and not have a bearing on monetary policy,” ANZ said.
The think tank also said lower unemployment rates represent structural development. It is expected to provide a stronger anchor to overall GDP growth and help cushion the impact of fluctuations in external demand over a longer time horizon.
Addressing gaps
Neda Secretary Arsenio M. Balisacan said the government is keen on addressing gaps in the labor market through various strategies.
These include expanding the digital economy, including the digitalization of Micro, Small, and Medium Enterprises (MSMEs) and startups, to address the declining labor force and increase labor market gains in 2024 and beyond.
“Digitalization enables alternative work arrangements, particularly for the youth, women, and those in the creative sector. This will help address the declining labor force,” Balisacan said.
“We will take full advantage of the liberalization reforms intended to attract investments in the Philippines, especially in digital infrastructure. Upgrading our infrastructure will attract investments that generate high-quality jobs,” he added.
Balisacan said the government will further support a more productive, agile, and adaptive workforce by passing and implementing crucial regulatory reforms, such as the Apprenticeship Bill, Lifelong Learning Bill, and the Enterprise Productivity Act.
He also underscored the need to establish a regulatory framework to allow alternative work arrangements, including part-time work, even in the formal economy.
“Allowing part-time work even in the formal sector will expand opportunities for lifelong learning, work experience in an organized setting, and coverage in social protection systems,” Balisacan said.
Meanwhile, the underemployment rate also eased to 11.7 percent in the same survey period from 14.4 percent in November 2022.
The number of underemployed persons, or those who expressed the desire to have an additional job and work hours, was estimated at 5.79 million in November, lower than the 7.16 million in November 2022.